The weekend’s political drama in Europe had a dramatic impact on the single currency to begin the week. The main beneficiary was the US dollar, which solidified last week’s gains over both the euro and the pound.
UK unemployment crept up to 4.4% in April, a modest increase from March’s 4.3%. Average earnings including bonuses meanwhile held steady at 5.9% over a three-month period, having been forecast to fall to 5.7%. The pound began this morning in the red against its main rivals after publication of the figures.
Since Friday, the euro has lost close to two cents against the US dollar while falling to its lowest against the pound since August 2022. Sterling has also struggled against the US dollar, although that was largely the result of scorching US jobs data to end the previous week.
With little in the way of impactful economic news on Monday, the eurozone was left to pick up the pieces from the election. As you may have heard, France is now preparing for a hugely significant election campaign that presents a stark choice to the nation, and all this just weeks before Paris is set to host the Olympic games.
French stock indexes and government bond yields took a big hit yesterday as uncertainty spread like wildfire. To give some indication of the scale of the losses, stock prices for the main French banks, including BNP Paribas, Société Générale and Crédit Agricole, fell by as much as 7.5%.
In its monthly report, the KPMG and REC, UK report on jobs predicted that lower inflation and resilient employment markets would translate to better economic news in the second half of 2024. However, the report warned that job market dynamics remained complex and that permanent placements were still falling, albeit at a slower pace.
In UK politics yesterday, Keir Starmer refused to rule out the possibility that Labour would look to raise the capital gains tax as it sought to boost Treasury incomings.
The Liberal Democrats unveiled their manifesto yesterday, and you can expect more analysis and special features from us as the other main parties follow suit. The Conservatives are due to unveil their manifesto today.
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